With peak season and Q4 consumer spend hurtling towards us, it’s important to get your logistics in a good place well in advance of when crunch time hits. In this article, we’ll share a Q4 primer of what brands and merchants must do to prepare for the next quarter of record-breaking sales.
Preparing for peak season entails careful planning and a few calculations, but in return you can enjoy peak profits without worrying about running out of stock, late deliveries, or unnecessary returns.
You’ll start to see spikes in sales around big shopping days, such as Black Friday, Cyber Monday, and Christmas, to name a few. You must be aware of any big sales days in Q4 so you can plan for sales spikes accordingly.
Here are a few important days to be aware of:
More dates to stay on top of are carrier cut off days. These are the final days you can send items with different carriers in order for them to arrive by a certain date and time. For example, if a package must arrive by December 25th, it must be shipped by December 15th if you’re using standard ground rates for FedEx.
The exact dates for 2024 are expected to come out in October and beyond, but we can use the 2023 shipping cutoff dates as a guideline.
Based on last year’s dates, sending items out by December 14th ensured delivery on or before December 25th across FedEx, UPS, USPS, and Amazon.
Calculate what you expect to sell throughout Q4, considering;
Add a healthy margin or buffer for unexpected success (ensuring you can continue to sell stock into the new year), and get all of that inventory into your warehouses and 3PLs well in advance of when it’s needed.
Getting goods into your warehouses early ensures you deal with orders, manufacturers, customs, paperwork, and any other necessary steps before the ports get congested with other merchant goods during Q4.
Whether you’re working with your own warehouse or outsourced logistics, give your warehouses a heads up on what items you predict will be your bestsellers. For example, you might have a special discount on a certain item for the holidays, a new limited time Christmas bundle, or a free gift with purchase just for Q4.
Letting them know your expected sales allows them to prepare and place items accordingly, possibly rearranging inventory to make, for example, your predicted bestseller holiday bundles the easiest to access.
Your cart options can affect your checkout conversion rate. Some shoppers are more price-conscious and want the most affordable ground rates, or even free standard shipping. Other shoppers are willing to pay for faster delivery.
According to the DHL 2024 Online Shopper Trends report, 54% of shoppers are most frustrated by high delivery costs, 46% are most frustrated by long delivery times, and 41% of shoppers abandon carts due to high shipping fees. In addition, 67% of respondents said that free delivery would encourage them to buy, with 42% saying that fast delivery would do it.
Give your shoppers the freedom to choose their delivery experience by optimizing your shopping cart shipping options. You don’t want to overwhelm shoppers with choice, but they should be able to choose whether they want to prioritize price or speed.
Tip: iDrive Logistics consults with all of our customers to optimize their shopping carts for conversion. Get in touch to learn more.
Many carriers will start imposing holiday surcharges, or additional fees for peak season referred to as a “Demand Surcharge. This surcharge must be accounted for in your budgets and projections. These surcharges have started and in most cases will continue to rise until December, then go into January of 2025. Knowing your pricing throughout the peak season means you can plan for profitability despite fluctuating shipping charges.
For example, there are often fuel surcharges as demand from travel and shipping drives the prices up. In the past years, we saw fuel surcharges go from just under 10% over the national U.S. average fuel prices, to up to 17% from our latest data.
Carriers will also begin announcing freight surcharges, with all major LTL carriers coming in at above 25%. We’ve seen these average out at 30%, as we’ve been monitoring what these surcharges look like over the years. One company has gone so high as a 60% surcharge for a truckload of freight.
Here’s a breakdown of what we know about 2024 demand surcharges.
FedEx First Overnight,® FedEx Priority Overnight,® FedEx Standard Overnight,® FedEx 2Day® A.M., FedEx 2Day,® FedEx Express Saver® (excluding FedEx One Rate packages)
FedEx Ground residential shipments and FedEx Home Delivery residential shipments
FedEx Ground® Economy Package Services
Demand – Additional Handling Surcharge
Demand – Oversize Charge
Demand – Ground Unauthorized Package Charge
Freight Demand Surcharge
All prices below are in place until further notice.
Applied to shipments from China Mainland, Hong Kong SAR or Macau SAR to the U.S.
Applied to UPS Standard shipments from Canada to the U.S. and UPS Trade Direct® shipments from the U.S. to Canada
Applied to international shipments from Mexico to all destinations (except Australia and New Zealand)
Applied to international shipments from select origins to all destinations (except shipments covered in Sections A-J here)
Additional Handling
Large Package Surcharge
Over Maximum Limits
Stay aware of holiday surcharges and account for them when you calculate your deals and giveaways, to ensure you stay profitable even with higher logistics fees.
The key to successful logistics during peak season is preparation and organization. Follow our tips above to ensure seamless operations and no stockouts or lost sales.
If you’re looking for a partner that can help you get the most affordable shipping rates amidst holiday surcharges, and optimize your logistics with an expansive network of 3PLs, reach out to iDrive Logistics today.
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